Perhaps they use the "Hollywood Accounting" trick of promising payments based on profits then arranging things so that no profits are actually made?

I know this is the saying, but why is Hollywood given the dubious honors? Wouldn't it be just as accurate to say Business Accounting?

Probably because they seem to have the most egregious examples based on works that seem to everyone else to be pretty successful?

"the Tolkien estate sued New Line, claiming that their contract entitled them to 7.5% of the gross receipts of the $6 billion hit.[23] According to New Line's accounts, the trilogy made "horrendous losses" and no profit at all."

I think most people would find it surprising that both Return of the Jedi and the Lord of the Rings movies failed to make a profit?

https://en.wikipedia.org/wiki/Hollywood_accounting

Points on the gross receipts are not points on the profits.

The fact that the trilogy was supposedly unprofitable shouldn't be relevant.

Yes, I should really have read that more carefully!

The situation might seem "extremely straightforward" to you, but it is an expensive and time-consuming kind of legal dispute, because it requires discovery of years of business records, expert witnesses in forensic accounting, and likely a trial to establish whose interpretation of key contract terms is the controlling one. That means years and at least hundreds of thousands of dollars in legal work, at the end of which a trial is hardly a sure outcome. Unless the plaintiff is willing to commit to funding that out of pocket, then he'd have to find a lawyer willing to take it on contingency, meaning he'd pay as much as half of any award at trial, after legal costs were deducted. Unlikely the best-case outcome is much, and the worst-case outcome could bankrupt an individual.

"maybe he did win in court and they simply ignored the court order" No, that doesn't happen in countries with solid legal systems, if it's a corporate defendant with easily identifiable assets.

Any recommendations on potential ways to avoid this kind of outcome when going into a royalty deal in the first place?

Have a really good lawyer who anticipates this sort of dispute. I would bet that the contract was written in a kind of "tricky" way that didn't make it clear exactly when the royalties applied.

I think the artist (unless they're like Radiohead or Taylor Swift or something) is always going to be at a massive disadvantage in any negotiation with a label (massive corporation).

This is just the nature of capitalism. The more capital you have, the more leverage you have.

The people who actually create the product are always at a disadvantage compared to those who own the means of that production.

You can try pooling resources together to negotiate collectively (unions), but without government intervention to put a thumb on the scale to try to even the playing field for unions vs corporations, even that would usually end poorly for the people who produce the actual product (see: union busting, the Pinkertons, etc.). Historically, they may actually even straight up just kill you for trying.

Capital also equals political power (even moreso since Citizens United), and corporations use that power to do everything they can to prevent that balance from tipping any direction but theirs.

It's just business, unfortunately. You can engineer a solid contract, but then the side with the leverage will look at it and say no. And that side is probably not yours; otherwise, you probably wouldn't be selling your business.

> then he'd have to find a lawyer willing to take it on contingency, meaning he'd pay as much as half of any award at trial, after legal costs were deducted

right, so "extremely straight forward". You seem to think that "giving up a lot of money" somehow invalidates it being "straight forward".

Also, I didn't didn't say it was easy (hence the "requires lots of disclosure" actually i mean discovery so thanks on that correction) - it is definitely not. But it is straight forward and very well defined. Royalty law is similar to family law in that there are a LOT of cases with lots of lawyers specializing in this. If you believe his case is special, I assure it, it is not.

Straight forward and easy are not the same things.

Sorry, I'm just using the dictionary definition of "straightforward," which is "easy to do or understand." I'm also a lawyer, and no lawyer on Earth would call a Hollywood-accounting case straightforward.

Perhaps we're using different terminology. I concede you are consistently writing it as two words, so maybe you don't actually mean the English word "straightforward."

Have a nice day.

Ah then my apologies on not knowing that "easy" is literally part of the definition of straight forward. Should have used a different term.

If Roger Linn, one of the most genuine and generous guys around in the business, calls somebody a bastard, they're absolutely a bastard.